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New Venture Fund Disrupts Status Quo

It started out as just another pandemic Wednesday. But that didn’t last long. I jumped on a call with a young female founder of color who was just getting her startup company off the ground. Right now it’s a side hustle. She’s passionate and driven to succeed but running into obstacles. Specifically, she’s having a hard time getting funding and she could use a sounding board for some key strategic business decisions.

Unfortunately, the struggles female founders face with raising capital and mentorship are not new. In reality, these women routinely are left out of the traditional venture system.

In fact, only 2.8% of venture dollars are allocated to women-led, women-owned startups according to Pitchbook.

VC Funded, Women-led Startups Have Better ROI

That only a sliver of venture funding is allocated to women founders is stunning because, when they do get the capital, data proves that VC-funded, women-led startups have better ROI according to a Boston Consulting Group (BCG) study. Startups with a female founder generated 78 cents of revenue for every $1 of funding, while male-founded startups generated just 31 cents.

If that doesn’t catch your attention, consider that private technology companies led by women are more capital-efficient, achieving 35% higher ROI, and, when venture-backed, 12% higher revenue than startups run by men, cites the Kauffman Foundation.

Speed to market is critical when first launching a business. Pre-series A capital is tough to get until a concept is proven and the founder can demonstrate market traction. However, founders need funding to get to that point and to accelerate the business. Fortunately, there’s an organization determined to tackle this gap head on.

How Women Invest Brings Equality To The Venture Landscape

Today How Women Invest announced a new $10M fund—with a first close of $5M achieved in just four months—focused on female investors and founders of color. They aim to revolutionize the venture landscape with a new investment approach and business model by bringing in more female investors to boost funding for diverse female founders at a time when they need it most.

On A Mission To Bring In More Women Investors

How Women Invest’s Managing Partners Julie Castro Abrams, also founder of How Women Lead, and Erika Cramer, are committed to bringing more women investors from diverse backgrounds to the decision table and to support more female founders who are creating sustainable change. They aim to inspire a community of 1,000 female investors by the end of 2020 and create an infrastructure to enable women of all backgrounds to support under-represented and under-capitalized female founders.

Diversity Is At The Core

The current investors at How Women Invest are 90% women (over half are women of color), with backgrounds in technology, healthcare, finance, and more. They also represent a broad cross-section ranging from highly-experienced venture investors to those who are first-time investors in a venture fund.

The Ultimate Differentiator

How Women Invest’s ultimate differentiator is its ability to leverage the deep domain expertise of its 13,000+ strong network of women which is made up of Fortune 1000 executives, board directors and advisors from its sister organization How Women Lead. Many of them are successful entrepreneurs in their own right, and believe current conditions offer an enormous opportunity to identify female founders with creative solutions that traditional VCs may miss. They also bring experience as corporate advisors who can assist portfolio companies with mentorship, industry expertise, and recruiting--a level of support often missing from conventional investor relationships.

Correcting The Imbalance

Now is the time to correct the imbalance of an antiquated, unequal landscape of venture capital that typically excludes women startup founders and women of color.

The community of powerful women and men who comprise How Women Invest intend to change the world by funding female founders who are innovating technologies, industries, services and products.

Enabling women to be a significant part of rebuilding the economy as we recover from the pandemic is surely a silver lining to this year that many hope to just get through. Fortunately, we have our investors who support female-led businesses and founders to remind us of the many victories still to come.

Disrupt the venture capital funding landscape by joining us at How Women Invest.

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